The Monthly, Weekly, and Daily Stochastics cycles are shown on the charts below of the 6 Major Indices. Also shown on each chart are Bollinger Bands, and the 50 (red) and 200 (pink) smas.
On a Monthly timeframe, the Stochastics:
- are in overbought territory on the Dow 30, S&P 500, Nasdaq 100, and Russell 2000
- have hooked down on the Dow Transports and are approaching 50
- have recently hooked down on the Dow Utilities
On a Weekly timeframe, the Stochastics:
- are in overbought territory on the Dow 30, S&P 500, Nasdaq 100, and Russell 2000
- are below 50 on the Dow Transports
- are in oversold territory on the Dow Utilities
On a Daily timeframe, the Stochastics:
- are below 50 on the Dow 30, S&P 500, and Nasdaq 100
- are in oversold territory on the Russell 2000
- are in oversold territory on the Dow Transports
- are approaching overbought territory on the Dow Utilities
In summary
, the Dow Transports is the only one that is close to its 50 Stochastics on the Monthly timeframe. The only one that is oversold on a Weekly basis is the Dow Utilities, but it is nearing overbought on the Daily. The only ones that are oversold on a Daily basis are the Russell 2000 and the Dow Transports. These three are the ones to keep a close eye on to see if buyers support these first any time soon. If not, we may say the Dow 30, S&P 500, Nasdaq 100, and Russell 2000 drop to their 50 sma on the Daily timeframe before buyers return, generally, to these markets at an oversold Stochastics level. If a subsequent rally is weak, we may see price drop to the 50 sma or the lower Bollinger Band on their Weekly timeframe to co-incide with an oversold signal on the Stochastics.
I would note that the S&P 500 is extremely close to forming a bearish moving average "Death Cross" on the Monthly timeframe...one to watch, as it could signal a return of high volatility if it forms.
Two volatility charts I'm watching are the following Daily ratio charts of the SPX:VIX and RUT:RVX. I'm watching these in conjunction with the above Stochastics cycles as they pertain to the S&P 500 and the Russell 2000 Indices.
Price closed today (Wednesday) on SPX:VIX just below the lower channel, once more, signalling an increase in volatility, with the hint of more to come...also the Momentum indicator closed below the zero level.
On RUT:RVX, price closed just above the lower channel on increased volatility. As I mentioned in yesterday's post, I'm watching to see if price drops below this channel and, subsequently, 37.00, as a signal of further weakness to come...the Momentum indicator closed below the zero level to signal that volatility may rise further.